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Chinas Sharing Economy Is Booming. But Can It Last?
Key Excerpts from Article on Website of Fortune


Fortune, May 29, 2017
Posted: June 11th, 2017
http://fortune.com/2017/05/29/china-sharing-economy-booming/

Fancy shooting some hoops, but don't have a basketball? Caught in the rain with no umbrella? Smartphone run out of juice? China's rapidly expanding "sharing economy," which already provides car rides and bicycle hire on demand, can help. China's government ... expects the "sharing economy" to grow about 40% this year to 4.83 trillion yuan ($705 billion). By 2020, it should account for around one tenth of GDP, illustrating China's aspiration to become a sharing economy leader on a global scale. At least 1.69 billion yuan ($247 million) in mostly series-A, or early stage, funding was invested in April-May in over two dozen start-ups offering sharing services. Twelve firms renting out power banks - typically compact, mobile battery chargers - secured 1.13 billion yuan, while newer businesses such as basketball and umbrella-sharing took in about 25 million yuan ($3.65 million) combined. While mobile-savvy, convenience-obsessed Chinese welcome the innovations, some critics question whether the demand is real, or sustainable. They say the low-revenue, capital-intensive model means profitability can be elusive. "Young people are embracing renting as a way of life instead of possessing things," said Emma Zhu, investment director at Beijing-based Innoangel fund, who has held off investing in any of these start-ups. "But the sharing model won't work in every situation. In some cases, they're trying to meet genuine demand, while in others they're not."

Note: While some companies in the "sharing economy" may misrepresent their practices, others appear to be getting it right. Read a great article describing 11 "platform cooperatives" which create a real sharing economy.


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